Hopes Dwindle for Eurozone Economic Recovery

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Standard & Poor’s has put another nail in the coffin of the prospects of a recovery of the eurozone. The rating agency says it expects the region’s gross domestic product to shrink this year and to recover almost not at all in 2014. This means that, without stimulus dollars for the weakest nations, the severe recession in southern Europe could continue for years. If so, Cyprus may not be the last disaster the region sees.

In its “Eurozone Outlook for 2013: Finding a Balance Between Deleveraging and Growth,” the agency reports:

Standard & Poor’s economists believe these difficult financial conditions will likely translate into another year of negative growth for the eurozone, with the prospect of only a weak recovery in 2014. We now forecast GDP in the eurozone will decline by 0.5% this year and bounce back by a still modest 0.8% in 2014. This is slightly down on our previous forecast for eurozone growth this year of negative 0.1%.

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